In a letter sent to customers Monday, RSA confirmed that the Lockheed Martin incident was related to Securid. Information "taken from RSA in March had been used as an element of an attempted broader attack on Lockheed Martin," RSA Executive Chairman Art Coviello [cq] said in the letter.

Coviello said the company remains "highly confident in the RSA Securid product," but acknowledged that the recent Lockheed Martin attack and general concerns over hacking, "may reduce some customers' overall risk tolerance."

In addition to offering to replace Securid tokens, the company is also offering customers its technologies such as its RSA Transaction Monitoring service, used by some banks to block fraudulent online transactions. Banks with a large number of consumers already using the Securid tokens may find it difficult to deploy new tokens, so this gives them another way of locking down security an RSA spokesman said Monday.

Every sixty seconds Securid tokens generate a second six-digit number that users can type in along with their passwords in order to access computer systems. This second means of logging in keeps networks safe even when passwords get stolen, but now the security of RSA's technology is in doubt.

Security experts believe that the hackers who broke into RSA now have the seed numbers required to generate phoney Securid tokens, but they would need a second attack in order to figure out which particular token is used by their victim. That appears to be what happened at Lockheed Martin, although the government contractor has declined to comment on the incident. Lockheed Martin spokespeople could not be reached for comment on Monday.

By issuing new tokens, RSA can use new seed numbers that are unknown to the hackers. EMC's security division says it has shipped about 40 million of the tokens to date.

The company isn't saying how much it expects the cyber attacks to cost, but even before the Securid replacement program, it was expensive. For its most recent financial quarter, ended March 31, EMC said the RSA group's gross margins dropped from 67.6 percent to 54.1 percent, year-over-year. In its quarterly earnings report, EMC blamed this downturn on the attack.

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert's e-mail address is robert_mcmillan@idg.com

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